Full Transcript

Utsav Somani: Anushka, welcome to the show. Before we begin, can you explain what a functional beverage is to our listeners?

Anushka Sharma (Quenzy): Of course. So, functional beverage is practically your daily beverage but with added benefits in it for your body. So, it has to taste great. It is great for your body and so it's a much better alternative to your everyday drinks, sodas, the legacy drinks that you have.

Utsav Somani: So, would kombucha be in this category?

Anushka Sharma (Quenzy): Definitely, kombucha is the functional beverage.

Utsav Somani: Is like a whey protein shake also in this category?

Anushka Sharma (Quenzy): A whey protein shake? Yeah, for sure. Why not? I think it's just if any beverage has an added benefit to it, then it's a functional beverage. So, whey protein is definitely a functional beverage.

Dhruv Sharma: Is chaat a functional beverage, a good old-fashioned functional beverage?

Anushka Sharma (Quenzy): No, yeah, yeah, yeah, for sure. It's been there in our culture for like yeah.

Utsav Somani: So, we tried, Dhruv and I tried getting your products on India, I mean our Delhi and Gurgaon quick commerce portals but we couldn't find it. So, hope to see you in Delhi soon.

Anushka Sharma (Quenzy): I'm very soon. I think 30 days, I think June 14th we'll be live with Instamart across Delhi, Gurgaon, Noida. Yeah, and we're launching three other flavors which also will be live starting first week of July.

Utsav Somani: So, let's dial it back. Amazon, L'Oreal, that's your background and now you decide to launch Quenzy. So, how did you come about this idea? Why Quenzy? Why this product?

Anushka Sharma (Quenzy): Yeah, so it came from a personal pain point of my life. I've had IBS for as long as I can remember. So, I couldn't find healthy foods or gut friendly foods or drinks at all in my life. So, when I joined Google, I had to quit Google because of some personal reasons within 60 days and then this idea came to me that okay why not, why don't we start something that's from my own personal pain point. So, that was one reason but the other reason is also that the soda market in India is 13 billion dollars today. The healthy soda market alone is touching 1000 crores this year. So, it is a big market, very untapped, a lot of potential. Of course, there's a lot of hiccups and sort of coming into the industry but definitely very rewarding. So, two reasons why I started this beverage. It's been rewarding ever since. It's been seven, eight months to our launch. Every day is a new day for us because every day there's so much change, there's so much happening that we are unable to process what happened today and having to be forced to go into the next day. So, yeah, it's been a very beautiful journey.

Dhruv Sharma: Do you run out of stock often?

Anushka Sharma (Quenzy): In fact, yeah, we've run out of stock once in October last year. We sold all of the next batch in four months. We are again running out of stock this month. Raw material procurement has been hard because the quality.

Dhruv Sharma: Why don't you hold up the camera and show us what it's like and we try it with fame. Beautiful. What are we looking at?

Anushka Sharma (Quenzy): Cucumber mint. This is one of our flavours, one of our best-selling flavours in Noida, actually. No added sugar, less than 15 calories, five grams of fibre and zero preservatives.

Dhruv Sharma: So, this has what I believe you guys call prebiotic fibre.

Anushka Sharma (Quenzy): Yes, prebiotic fibre.

Dhruv Sharma: So, yes, let's do a one-on-one on what are prebiotics and what's fibre doing inside a drink?

Anushka Sharma (Quenzy): Sure. So, I'll start with probiotics. That will be easier for me to explain what prebiotics are. Probiotics are basically the live bacteria in your gut that help in digestion and prebiotics, which the soda has, is the food for the bacteria. So, prebiotics and probiotics have to exist in the stomach in symbiosis for a healthy gut. This has five grams of prebiotic fibre and everyday consumption of a human is about 30 grams. So, we provide about 17 percent in one can is what I believe, yeah.

Utsav Somani: That's amazing. And I mean, flavours are also pretty nicely named. They're not Indian, but they're Indian adjacent. Is there a reason why you went with these flavours and not like the typical Jaljeera or like the one which are more common?

Anushka Sharma (Quenzy): So, when we were picking our flavours, I come from Amazon, right? It's a customer-first mindset, like that's what we follow. So, that's the value I brought with my brand. And when we were picking flavours, we sort of got to our consumers, we did a 3,000 people survey to understand what price range are people looking at, what flavours are people looking out for. And so, we gave them a list of 15 and six flavours came on top, blueberry, litchi, cucumber, basil, mint, orange and vanilla. So, we made concoctions of each. Of course, we didn't want to go completely new. I don't think we wanted to go with completely new flavours. And so, we thought we'll keep it a bit of mix of basil plus new flavours. So, blueberry, litchi, orange, vanilla, and cucumber mint. That's why the flavours.

Dhruv Sharma: You have to keep up with the times with blueberry. I mean, of all things, they're not even native to India. It's so cool that the kids love them now. And so, yes. So, you were telling us about what's fibre doing inside a can. But you also said no added sugar. And very often people will oversimplify and say sugar is the enemy of your gut. And so, of all the choices that people have, and God knows they have many. What are the top three reasons they should pick your can over anything else?

Anushka Sharma (Quenzy): I don't think sugar is the biggest enemy of our lives today. But most people including me and including the both of you, I believe will try to cut sugar. So, I think why I think pick ours is because 99.99991% to be precise, sweetness comes from the fibre itself, because there are fruit fibres in it. We add minuscule amounts of sweetness to sort of get the soda super crisp. And we try to sort of not have an aftertaste on the palate. So, you could have like two to three in a day, which is quite healthy for you. And it's quite tasty. So, you could keep coming back to us. If I have to tell you, blueberry, which is our most sold flavour is out of stock right now. This flavour has gained a lot of love from the Gen Z consumers. So, I think age group 20 to 25. And this flavour has been picked up the most during this month. I mean, the last two months April and May, because of the scorching heat across India. So, yeah.

Utsav Somani: What's the science on sugar right now? I believe it's changing pretty rapidly, right? I mean, monk fruit is now catching up. Then there's Stevia, which was big a couple of years back. So, and sugar free much before that. So, what is the latest? Allulose? I mean, where's the sugar world headed? The alternative sugar world?

Anushka Sharma (Quenzy): The recent ones, the recent sweeteners that have gained a lot of traction would be definitely allulose. But in a beverage, they give a synthetic aftertaste. So, we didn't go with it. Monk fruit definitely is a great option. If it's made affordable for most Indian households, it's a great option. Today, it's very, very expensive because monk fruit, most of the monk fruit is imported from China, in India, that whatever we consume. Stevia is still quite big. I think, I mean, it's not gonna find its way out anytime soon. So, yeah, I think sweeteners are definitely taking over. But I still feel that a very small amount of sugar every day doesn't hurt. So, maybe five grams of sugar doesn't hurt, but very difficult to sort of manage how much sugar we've consumed in a day. And that's why I think most people are going, cutting sugar or no added sugar. And it's the easiest way for us to, like sort of convince the consumer if the product has no added sugar. So, they instantly feel like, oh, they're going to be lesser calories. So, I'll tell you one gram of sugar has about 4.5 or 5 calories. This soda entirely is 13 calories. And most of the calories come from fiber, the healthy calories. But I think, yeah, these are the three sweeteners I think that are really, really taking over the market today.

Dhruv Sharma: Great. And, you know, when you held up the can, I haven't obviously seen it in person, couldn't help but notice how it just catches the eye. And the thing with these things is you see them before you taste them. And so, talk to us a little bit about how you thought about the name, the brand. And so that if other founders, you know, who are going to be, who are a few places behind you hear this, they get, you know, a few good tips from you.

Anushka Sharma (Quenzy): I think how I went about naming the brand was a very chaotic journey. So, we wanted to play with the word quench because it's a beverage brand. We tried to sort of trademark the word quench in the beverage class. And then we got a notice from the skincare quench brand saying, hey, you guys can't do this. We exist. And then we went back to naming the, the name had to have a meaning for me. So what we went back to our basics, who are we building it for? We were building it for the Gen Zs today. And we're still working around with the word quench. So quench plus Gen Z, quenzy, that's how the name came.

Utsav Somani: Yeah. Oh, wow. And you went through 83 iterations, I believe.

Anushka Sharma (Quenzy): Yeah, man, we went through all kinds of names. We went through Gutsy, Peppy, Kenz, whatnot, I think 83 names before we got here. And I think this inspo came from an existing D2C brand called Perfora. I went through their signs of how they found their naming. And I've been following their brand for a while. And then I went back to my basics and said, hey, this is the word. This is who we're building for. We should name it quenzy today. And it's really stuck with the consumer. But it took us 83 names and three months to sort of find a name alone.

Utsav Somani: I'm a sucker for good branding. So do you want to give a shout out to the agency or the person who worked on your brand?

Anushka Sharma (Quenzy): Of course, she's a very, very good friend of mine. Harshita Mittal. So sorry, guys. Harshita Mittal, she runs the studio called Rule 9 Studio. She was super great with us. She was she's been with us since the start. There is small, small Easter eggs in the entire packaging as well. So if you see there's a Korean heart, because I personally love Korean drama.

Utsav Somani: If you look at this, there's a number of places that have popped up in the city. It's insane. I don't know who will voluntarily pay for this.

Dhruv Sharma: Does it occur to you that we've gone through like, I don't know, half of our life without anyone ever naming a product for a generation like millennial? Like no one ever thought like Anushka did and so.

Utsav Somani: But talk to us a little bit about the numbers. I think, where are you at in terms of scale? How much does a can retail for? How much? I mean, do you end up saving on a can? I mean, whatever you want is close comfortably.

Anushka Sharma (Quenzy): The MRP of each can is 99 today. Our operational MRP has been like roughly on an average we sell it at 85. I don't think I can give out the gross margins definitely. Tell you how many cans we sell in a month are major distribution channels. So last month, we closed about we closed at 15,000 can sales just last month. This month, we're closing 22,000 cans of sale. Major channels being Amazon, surprisingly has become a great channel for us. First Club, the Q- Com channel back in Bangalore. And vending machines, corporate pantries, hotels and restaurants, biggest, biggest, biggest channels. So I think through these, I think we do most of our business. We're trying to sort of scale into three new flavors and sort of achieve 100,000 cans over three months. But yeah, it looks doable. But yeah, I think by August, we'll be closing that number. If I'm talking about the cost, the COGS of the product is one fourth of the of the retail price that we do right now. So yeah, those are the numbers.

Utsav Somani: And is diet coke shortage real because of the aluminium stuff?

Anushka Sharma (Quenzy): Very, very real. Printed cans are very hard to acquire. And that is why they shifted to the bottles. I don't think it's any other raw material, but the printed cans itself. So yeah, it is pretty real. We sort of also faced a lot of can procurement issues. In fact, we are getting stopped out because of the can procurement issues. So yeah.

Utsav Somani: Awesome. Dhruv, any final closing question for Anushka?

Dhruv Sharma: I don't know if it's my closing question for Anushka, but talk to us again about the channels. Anushka, you said restaurants and I mean, the spaces where they're serving it. So how are you cracking those partnerships? How big is it in the channel mix right now?

Anushka Sharma (Quenzy): Cool. So the largest channels I could tell you in the descending order, it is for us B2B, so that's corporate pantries, vending machines and hotels and restaurants. I think vending machines were the toughest channel to crack because sort of distribution is hard through vending machines. But we entered fitness spaces also through vending machines and found good numbers. So you have to talk about the numbers there. Across 100 vending machines, we clock 4000 cans in sales in a month. These are the numbers.

Utsav Somani: There is shelf life for the product? I'm guessing not.

Anushka Sharma (Quenzy): We started out with seven months. This was back in March. Our shelf life in March was seven months. This month onwards was nine months. So we clocked nine months on shelf life.

Utsav Somani: And you're doing this solo and bootstrap. Is there a constant decision in this?

Anushka Sharma (Quenzy): Oh no, we will start raising. We will start raising in three months. It's just that every time we start fundraising, there's something coming up and we're not able to focus on that. But the solo, I talked about it in the beginning. Unfortunately, I'm a solo founder, but that's what I have a beautiful founding team. They are the backbone of whatever we do today. Be it content, be it growth, be it distribution. But yeah, we will be raising in three months. Three months time. Yeah.

Utsav Somani: All right. Wishing you all the best. Summer months are coming up and hope to see you in Delhi very soon for the summers.

Anushka Sharma (Quenzy): Absolutely. I hope you guys try the product in a month and let me know what you all think.

Utsav Somani: Perfect. Thank you for coming on our show. Wishing you the best.

Anushka Sharma (Quenzy): Thank you so much, guys. Thank you.

Utsav Somani: All right, listeners, we're moving on to our next segment. We've got Nakul from Afogato. Nakul, welcome to the show.

Nakul Kelkar (Affogato AI): Hey, what's up?

Utsav Somani: Excited to be here. Love the show. Before the show started, we were joking with you on how you should be making yourself a coffee slash Afogato. Yeah, I mean, like I'm from San Francisco. It's pretty late there.

Nakul Kelkar (Affogato AI): So I work with the India team. So I usually work late at night. So I'm happy to happy to stay awake a little bit more. My habit of staying up late hasn't gone. So tell us the product. What is Afogato? Right. So at Afogato, we allow brands, agencies and marketers to create ads, social media content or any kind of, you know, pixels if you if you if you need them. Right. We started with images, but we have slowly moved on to doing a lot more. And now we do videos and like we do finished videos using our agent, a lot of other bunch of stuff.

Utsav Somani: So, I mean, you're in the clipping economy or not clipping economy, but you want to do fresh videos. But suppose like T.O.N style show wanted to use your product, would we be able to use it just to make clips or segments?

Nakul Kelkar (Affogato AI): So we are we are not. OK, so you can think of the whole generative media, at least the video world into two segments. Right. There are the ones which are editors. Right. So so you've taken pixels and like media that you have captured from cameras and then you cut them. And the other one is generative. So it's not reductive, it's additive. The analogy that I have is editing is more like CNC machines. Right. So you have a block of metal and then you sort of take away the parts and like take away like the metal out to make the finished part. And generative media is more like 3D printing. So, you know, you sort of like generate the video from the scratch. If Utsav and Dhruv did not exist, we would be the perfect platform to create, create a show like yours. But since you guys do, I think you would fall into more of the editing world.

Dhruv Sharma: Now, can you take us behind the scenes, give us a sense of what the production pipeline looks like end to end?

Nakul Kelkar (Affogato AI): Like for so. OK, so for a lot of our customers, it actually depends upon where you start from, right? A lot of our customers don't even have like, you know, a proper photography setup or anything else. So if you want to sell a product, you would maybe just take a photograph, which is in a bad light, in a bad background and everything else. So you want to clean up the background, put it into a proper studio kind of framing, select like some kind of ad team that you want to get to and then sort of create that ad from there. A lot of people do have a lot of good assets and they want to use that. So for them, the pipeline starts a little bit later and they can start using just the product itself and like images that they have and maybe a little bit of their branding touch and then sort of create assets from there.

Utsav Somani: And you have something known as face lock as well, right? Which is gaining character likeness. Is that one of your biggest advantages? Yes.

Nakul Kelkar (Affogato AI): Right. So so we would be one of the first platforms to sort of like crack it. So we started pretty early in 2023 when the diffusion world like the so like AI world can be classified into like diffusion and LLMs, right? So these are like sort of like two different broader categories. Diffusion world was pretty much sort of not being used in production at all at that time. It sounds like ages ago, but you know, it was just like two years back. The world has like moved on from that spaghetti eating video of Will Smith, if you guys remember that, right? So, yeah. So I think I think the first thing that came to us was like unanimously from all the market was we cannot create a story if we cannot keep the character same. So if the person or product cannot be seen, you cannot create a story, you cannot create a coherent narrative, no matter how small or large it is, right? So even for a small five second video, you might need five shots. And even for a carousel, you might need like, let's say, five different images, but they need to be in the same sort of, you know, lighting background, sort of same sort of taste, to be honest. So I think that requirement started to come with us like very, very early on. And we were one of the first people to like crack it on like a larger scale.

Dhruv Sharma: The proposition for freelancers or small organizations is easy to understand. But what about big brands? What's the proposition for them?

Nakul Kelkar (Affogato AI): So even for big brands, right? I mean, the mere pipeline looks a lot, lot, lot more complicated than maybe, let's say, you would think of from the outside. For example, one of the brands that works with us, for them, the actual photo shoot of the product, and it's a toy. So it's like you would want a child to be playing with the toy itself. And then you want the relative size of the child and the toy to be there in like a lifestyle photo. To get the child and to schedule a photo shoot, and to have like childs of different ethnicity, different backgrounds, different age groups, all of them in one location, having to sit with one product, doing the photo shoot in five different locations, with five different carpets, five different tables, five different lightings, is like the planning itself goes on for like months, right? Because I'm like, it's a huge, humongous effort to do that. They can just now use us and, you know, generate content like on the fly without having to do anything. So even for larger brands, it's not like, it's not just like they have time, they have money, but they don't have time. And time is still of a lot value.

Dhruv Sharma: And I would imagine that there's some, sometimes there's just circumstances, you need to respond to something like what they call moment marketing, and you don't, you know, you don't have enough time to put something together.

Nakul Kelkar (Affogato AI): Right. I mean, like, the world isn't waiting for the meme to, for the meme, I mean, like the meme will go away tomorrow, right? If you want to capture it today.

Utsav Somani: And your website mentioned some big numbers as well, 1.5 million creators and businesses you're working with. I think Runway is one of the biggest players in the space. They also announced that they work with just 1 million people right now. So what has led to you working with a much larger base and what's the secret for success?

Nakul Kelkar (Affogato AI): So one is, I think we were fortunate enough to be early. I think we have a great growth team. My co-founder is like amazing at growth. I think Runway I'm sure has like a lot more, did Runway really announced like 1 million? I'm sure like Runway has like a little bit more users, but Runway is primarily into video and their focus is more on the larger, larger, bigger customers, like slightly higher up segment than us. We cater to a lot of like smaller mid S&B kind of businesses. So just the number, the kind of the market there is, and it's just like the numbers that we have are much more larger. What's the average ticket price for a subscription and the lifetime value? So our subscription starts at like $24 and goes up to $250. Most of our users spend about $100 a month. Interesting. Nice.

Dhruv Sharma: Nakul, you guys all, you work, I mean, you work predominantly on vertical short form videos, which in the US, which includes TikTok, we don't have here in India. I'm wondering how, I'm just curious actually how TikTok is being used by small businesses to their advantage in ways that we just simply don't have over here right now. Maybe there's an opportunity for someone to build a business.

Nakul Kelkar (Affogato AI): Right. I think, I mean, like people have tried to sort of replicate TikTok, I mean, like are you talking about like replicating TikTok in India or?

Dhruv Sharma: It's not even an Affogato related question. I'm just curious how small businesses are using TikTok to their advantage in the US, right?

Nakul Kelkar (Affogato AI): Oh, okay. Yeah. I mean, like, I mean, TikTok and Instagram, I think are like huge distribution markets for all small businesses, right? I mean, one good piece of content can give you the marketing scale that would like bring, I mean, like that would cost you like thousands of dollars, maybe like on a paid channel. So, and like generating content has become a lot more easier. I think people can attempt those moonshots a lot more frequently than they used to before. So, it's still a spread. You would still want some paid marketing, but then I think there is still some way to do organic marketing like a lot more better these days.

Utsav Somani: And what's happening in the world of AI, UGC? I mean, everyone's creating so much content, like where does this world go? Like, I mean, people are going to start accepting this at scale?

Nakul Kelkar (Affogato AI): I think I'm, okay. So, I think I have like more sort of nuanced thoughts here. I think people discriminate pixels generated from AI a lot more than they should. Pixels are pixels, right? I mean, like an image is an image. There are two kinds of images in the world. One, I think when we are trying to capture a moment, like if I'm with a friend, if I'm with my wife, we are somewhere, we want the moment to be as is. Everything else is sort of construction, right? I mean, like you go to, I mean, a fashion photo shoot or a product photo shoot is a construction of a reality. It's not reality. It's like, you know, there's a makeup artist, there's a light guy, there's a studio, there's a camera. All of that is designed to make the garment look better or the product look better. I think it's the same way with like AI essentially, right? I mean, AI technically has always been in our phones and our processing pipelines and everywhere else. I think at what level, at what percentage of pixels, if they are generated from a diffusion model, would you now start calling the image AI generated versus if it wasn't at all, right? I think that's the question that maybe like people should be asking rather than discriminating against AI generated images. I mean, like the models have gotten so good that I think even right now, like sometimes I get, like even I have to think, is it really AI or was it like, is it like shot practically? So I think people will start to accept the content. I mean, like people are already starting to accept the content, to be honest with you. I think we will sort of become much more forgiving. Just like we have become with em dashes, by the way. You see em dashes everywhere now and we don't give a damn, right? Like everybody knows it's all here, actually. It's all okay.

Dhruv Sharma: You know, what's even worse than em dashes now is this thing they call negative parallelism, which is all these models using, you know, setting of a contrast. Oh, it's not X, it's Y. It's not X, it's Y. You can see that coming from a mile, but you know, what you said is super interesting, Nakul. The same debate actually, or the question that Utsav asked, the same debate also goes on in the music industry, for instance, where the classical music purists are like, oh no, I mean, this is all, this is all made up. And then people in the electronic music industry, they'll say, but it's still at some level, it's still made by humans with the possibilities of the instruments of their time. So, you know, the, the possibilities have changed dramatically. Do you foresee a future, maybe 10 years out where we pretty much have like a bubble here where there's either heavily commoditized, near perfect, you know, generative content, and then on the other end of the spectrum, like very artisanal, completely craft?

Utsav Somani: I personally think that copyrights rules are gonna, are in for a rude awakening. I think in the next five, 10 years, I think copyright rules and likeness, Hollywood, I mean, electronic DJs and stuff, I think everything is gonna, I mean, our balance will shift towards anyone able to generate content for free for themselves. I think it's going to be a whole different world when, I mean, you can literally recreate like a Coldplay song sitting on your laptop and then what can Coldplay do? They can't charge you for it. So.

Nakul Kelkar (Affogato AI): Right. So let me maybe just like answer all good. I'm like, give my opinion on all of these, right? I think as far as like music goes, I'm a trained tabla player. I like, I have very strong opinions there. I think I want music to be generated by humans. I have a very different, I have a split personality when it comes like videos and videos. Everything should be generative, but at home, it should all be. Not in my, not in my earphones, right?

Dhruv Sharma: So. You're a futurist.

Nakul Kelkar (Affogato AI): But I'm sure I'm also being fooled in the musics, right? Like, so as a consumer, I think you are always different than as a builder. And I think that's the dichotomy that, you know, one has to live in. I think as far as let's say the balance of power question goes, it will move towards more creative people. Whether, I mean, they might be in large organizations, they might be individuals, they might be, they might be of a different age segment, they might be of a different economic background. It really doesn't matter. I think as long as technology empowers creatives to create more content, to create better content, to express themselves, I think that's all that matters, right? Ultimately, I mean, like this is where, this is like the good part of AI, right? I mean, people can now create YouTube channels who do not even have a camera, who do not even have like a decent mobile phone. This wasn't possible like, you know, like four years ago. I mean, like, we are essentially living in a, in a, like a, like a dreamland for these kind of people who have been able to sort of break through into a new whole segment, which, which was just like impossible for them. And that's the good part of AI. Like that's the, that's the empowering part of AI.

Utsav Somani: But also there are downsides to it. I think, I mean, it's a double-edged sword where, I mean, deep fakes and everything. And now how do you distinguish reality from, I mean, AI generated content? I think that can be also very problematic. I saw some examples on X where people are generating like, I mean, almost real life, like Aadhaar copies or pan card copies or a canceled check from somebody. And that I think is very, very scary. I don't know what guardrails can be applied to this, but so many different use cases exist that can be used against you or against somebody that I think it definitely is a pretty scary world that we're heading into, but I think one which we should be looking at with more optimism. So on that note, Akul, I think, thank you so much for coming on the show, wishing you the very best and hopefully you get some good sleep now. Oh, sure. Thanks. Thanks. Nice to be here. Okay. All right, listeners, that's it. Short and sweet from us today. We'll see you on Monday at four o'clock. Have a nice weekend. Thank you.